There is every indication the Jeffrey Mine will reopen soon

MONTREAL, Aug. 15, 2011 /CNW Telbec/ - The consortium of international investors currently negotiating to invest in the Jeffrey Mine is very pleased that the Quebec Government has extended the deadline to finalize the purchase agreement to October 1.

"Prior to finalizing the agreement, the Quebec Government and the investors wanted to ascertain that the underground mine is in good condition.  We now have given them clear indications that the underground mine is in excellent shape and that the underground mining operations can begin very shortly after the financing is finalised," Baljit S. Chadha, who leads the consortium of investors, said.

More than 10,000 metres of tunnels, galleries and shafts excavated and built at the cost of $120 million in the early 2000s had been intentionally flooded since the proposed conversion to underground mining was postponed eight years ago. Water from the access ramps, tunnels, galleries and shafts has been completely pumped out over the last few months at a cost of more than 3.7 million dollars, financed by Mr. Chadha. That has made the inspection of all the galleries possible in the last two weeks. Inspections have revealed that less than 50 metres of galleries need consolidation work. The rest of the tunnels, galleries and shafts are in perfect condition, and there are no instability issues. The galleries were built to specifications in order to reinforce the rock, including the use of shotcrete and rock bolting (cementation).

Once financing is in place, it will be possible to restart mining operations and to produce chrysotile fibres within a few months.

"We have been very active in the last few months, in discussions with the investors and with the government and have been working hard on eliminating any obstacles to concluding an agreement. We are close to a deal," Baljit S. Chadha said. Mr Chadha is a Montreal businessman originally from India. While he is not in the lobbying business, he is on the Quebec lobbyist register, in keeping with the regulations requiring those who make representations to the government on behalf of their organizations be registered.

Background

Financial difficulties forced the Jeffrey Mine to reduce the open pit operations and to delay the completion of the underground mine in 2003. The economic crisis in Asia temporarily reduced the demand for the company's products concurrent with the investment to convert the open pit mine to an underground mining operation. In order to complete the transition from open pit to underground and to return to full time operations, the consortium plans to invest approximately $83 million over 3 years, including $25 million of their own funds and a $58 million loan that would be guaranteed by the Quebec Government.

Two thirds of the world's population uses chrysotile for fibrocement products (shingles, pipes, panels) and the demand today is higher than ever, with further increases expected in a number of emerging markets. Chrysotile is used principally in the construction of low cost housing for people with very low income, farming and industrial facilities and in the building of infrastructure such as storm drains, drinking water pipes and sewers. The chrysotile asbestos extracted from the Jeffrey Mine, which has been operating for more than 130 years, has always been known internationally for its high quality and is free of amphibole asbestos.

For further information:

Guy Versailles, ARP
Versailles communication
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